2006 (6) TMI 454 - AT - Central Excise

Summary

Issues:
Department's appeal against Commissioner (Appeals) order regarding treatment of waste and scrap generated in manufacturing process.

Analysis:
The case involves M/s. Jain Metal Components (P) Ltd. procuring duty paid waste and scrap, taking credit for the duty paid, and clearing it to M/s. Alcobex Metals Ltd. for manufacturing rods on a job work basis. The waste generated by the job worker is recycled, and the rods are returned to M/s. Jain Metal Components (P) Ltd. The Department argues that the waste and scrap generated during the manufacturing process should be considered as final products at the hands of M/s. Jain Metal Components (P) Ltd., requiring duty payment before clearance to Alcobex Metals Ltd. The Department also asserts that duty should be paid by Alcobex Metals Ltd. on the rods manufactured from the waste, with the duty paid being available as credit to M/s. Jain Metal Components (P) Ltd. for finished goods. The original authority confirmed a demand in relation to rods manufactured from waste and scrap generated by M/s. Jain Metal Components (P) Ltd.

In response to the Department's contentions, the Commissioner (Appeals) dropped the proceedings regarding the demand from Alcobex Metals Ltd., emphasizing that the waste and scrap generated by M/s. Jain Metal Components (P) Ltd. should be treated as final products, not inputs under Notification No. 214/86-CE. The Tribunal, considering the peculiar circumstances and the initiation of movements under the said notification, upheld the Commissioner's decision, stating that the scrap and waste from M/s. Jain Metal Components (P) Ltd. should only be treated as final products. Consequently, the Tribunal found no merit in the Department's appeal and rejected it.

Therefore, the Tribunal's decision affirms that the waste and scrap generated by M/s. Jain Metal Components (P) Ltd. should be considered final products, aligning with the Commissioner (Appeals)'s view and dismissing the Department's appeal.